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Wednesday, April 24, 2013

above: As Finance Minister Penny Wong is well-placed to attempt to 'head off' any strategy of unnecessary austerity for Labor's May Federal Budget. Penny, Please stand up for what it right!

Tristan Ewins

Dear Readers: I wrote the following
after the government’s announcement that it was cutting back higher education
funding in order to pay for a much-reduced version of the Gonski education
reforms in the May Budget:

As to what is determining Labor’s behaviour – I think there
was an element of cynical opportunism when it came to Sole Parents.(playing on peoples’ prejudices – but
ultimately causing more self-harm in the process – by losing credibility with
parts of its base… )

But on Gonski I think it’s a bit more complex.I think – as a friend of mine said a short way
back – that Labor is ‘curling up into a ball’ in the face of attacks from
powerful vested interests.Hence the
collapse on superannuation concessions – ie: tax shelters for the rich; on the
Minerals Resource Rent Tax; and now the retreat on Gonski.

It seems they would rather compromise their core ‘signature’
policies then take on the powerful and wealthy vested interests…And what they don’t seem to grasp is that
this does not win respect over the long term.It only makes our adversaries more confident, brazen and aggressive in
their attacks on what remains of the welfare state, the tax-transfer system,
the social wage….IN short – If we never
fight -It means we almost completely lose
control of the discourse over the long term.We all but completely lose control over the definition of the prevailing
‘common sense’ on everything from tax to industrial relations, and social expenditures,
infrastructure and welfare…The
Conservatives get their way no matter which party governs….Failure to defend social justice, progressive
taxation, the principle of
redistribution- will mean the
self-liquidation of Australian social democracy unless someone else steps into
the breach.And the Greens could not achieve
that on their own either.

But that said there IS progress for state education if
Labor’s policies go through….The means
of paying for it are regressive; But it is still a more progressive overall
outcome than what we already had…Students – including students from low income backgrounds – will have to
repay ‘start-up scholarships’. This is
bad. Though it is mainly students from
higher income backgrounds that will lose out from the decision to prevent them paying
their HECS fees up-front.And at least
repayment will be deferred.(the
obvious question now being where the repayment threshold is set)

Regardless, though, it is a Positive-Sum Affair for
disadvantaged students taken overall– many of whom would never enjoy the
opportunity of tertiary study were it not for this re-ordering of priorities.Hence additional resources for indigenous,
disabled, non-English speaking and poor-literacy students – and the ‘Lion’s
Share’ going to state schools.

In short – this policy could also be crucial in stemming the
drift of students to private schools to the point of ‘critical mass’ – where
otherwise the state sector would become permanently second-class and
residual.The policy inflicts an
injustice on tertiary students –but will provide opportunities for many who
otherwise would never have a hope of a tertiary education; or even of making
the most of Year 12.

The policy involves about half the resources that
Labor originally promised, also.Much is
expected of the States given their finances.The States should not be obstructionist – or blur the issues.But while they are low on cash themselves –
the logic of events could lead to user-pays infrastructure inflicted on us by
the State Governments.The states should
promote the cause of federal tax reform to make all this unnecessary– but it seems they are only interested in
increasing the GST and removing exemptions for food – as today’s conservativesseem to ‘believe in principle’ in flat
taxation that hits the poor hard.Apparently thisIdeology is not “class warfare” but anything else even mildly
progressive is...

All this also begs the question what is going to happen to
the National Disability Insurance Scheme (NDIS).Tony Abbott says he supports it.But Of course he will have no problem
‘neutralising’the issue by paying for
the program with savage austerity against the apparently ‘undeserving’ poor –
for example the unemployed; and possibly against mentally ill recipients of
Newstart deemed able to do ‘some’ work.Where Labor would get the money from is anyone’s guess.But with a price-tag in the vicinity of $15
billion/year to implement the policy I am afraid we are going to ‘squib’ the
issue again by only half implementing the policy; and projecting full
implementation into a distant future that may never come.

Labor would be more credible if they stood up on these
signature policies even if it means abandoning the idea we can have a ‘Positive
Sum Affair’ FOR EVERYONE.Again this is
the myth cultivated with the whole ‘social justice equals class warfare’
discourse. ( ie: that ‘the state should get out of the picture’)This is sold as a liberal principle and
ironically it exploits past Australian egalitarian traditions and
self-image.But in fact this discourse rests
firmly on the interests of the wealthy; who seek to divide us all against each other
on the basis of an economically Liberal Ideology, ‘downwards envy’ and other
prejudices.

THAT outcome (ie: squibbing on NDIS) is what we need to
agitate and mobilise against as the 2013 May Federal Budget approaches.Without an assertive, confident and
progressive Labor the task will become all the more difficult for the government,
andLabor will not be able to inspire
activists, trade unionists, environmentalists into the kind of on-the-ground
campaigning which alone can counter Abbott’s advantage of uncritical and biased
monopoly mass media coverage . It could actually be a more difficult task, in
fact, than had they stood up to the vested interests in the first place.

Finally: now that we have ‘squibbed’ on the issue of
superannuation concessions even centre-left commentators like Tim Colebatch are
arguing that significant austerity cannot be avoided.But let’s be clear: Compared to other OECD
countries we have small government in Australia.By some estimates removing ‘middle class
welfare’ could save a fewbillion; but
this pales in significance to the money that could be saved by winding back
superannuation concessions for the top 5%-10% income demographic, and by
reducing dividend imputation – just for a start.Insteadof conceding the logic and the agenda of austerity rather Labor and the
Left need to go on to the front foot and move towards an extension of social
welfare for the most disadvantaged and the most vulnerable….Aged Care is perhaps the most vital area
where action is necessary – when one considers the regressive nature of existing
user-pays mechanisms – and the sheer extremity of the human suffering by these
amongst our most vulnerable citizens….

Tony Abbott apparently has a Democratic Labor Party
background if you trace it back far enough…And while the DLP and the NCC did untold damage to the ALP during the
years of the split, you would at least expect from them a ‘Catholic social welfare’ outlook with a
measure of compassion for the poor.Some
have commented that towards the end of his life B.A Santamaria realised that in
facilitating the neo-liberal hegemony the DLP did more damage to its cause then
had ever been inflicted on them by the Left.And now Abbott himself promises to be the bearer of previously unheard
of austerity.

It is not only Labor that needs to search its conscience
when it comes to the treatment of the vulnerable, including Sole Parent
families.Abbott could have used his
leadership of the Liberal Party to lead it down the path of ‘compassionate
conservatism’ after the fashion of the immediate-post-war German Christian
Democrats.Instead the disabled and the
unemployed stand to suffer, and one can only speculate where else the axe may
fall when it comes to further austerity in the Ideological pursuit of
ever-smaller government. The American-style rhetoric against practically
any and all social investment is incessant – with no regard for the human
consequences when the time comes to put this rhetoric into action…The rights of the Aged don’t seem to be ‘factoring
in’ with either of the major parties, and nor do we hear much from the Greens
on that issue as well.

For both Abbott and Labor – Search your consciences when it
comes to austerity and the rhetoric of small
government.Neo-liberalism is not the
proper ideology of Labor and social democracy, and nor is it the proper
Ideology for compassionate Conservatism with a Christian ‘social welfare’
outlook.

For Labor’s part it is not too late for a mix of tax reform
and reprioritisation of expenditure that avoids austerity against the
vulnerable.There is the potential mix
of MRRT reform, reduction of dividend imputation, and winding back of ‘middle
class welfare’ – that combined could bring in maybe $15 billion a year.Reform of superannuation concessions has
been ruled out for this year – but must factor into our plans for the future.

We have a choice.Only a progressive ALP can inspire and mobilise its core base and
potentially sympathetic social movements.The May Budget is perhaps our last best chance to achieve this.

Saturday, April 13, 2013

OnJan 1 2013, the Australian Labor
Government moved 84,000 sole parents, whose youngest child had turned 8, from
Parenting Payment Single (PPS) (Grandfathered), a single parent pension, to
NewStart, an unemployment benefit. The government justified this decision by
suggesting they were merely encouraging workforce participation and bringing
equality to 2 different groups of single parents, (pre and post 2006
recipients).

Maarit Hahkomaa argues for the recision of that decision in light of the existing pressures on sole parents - and the needs of their children. The May Budget is the perfect opportunity to sets things right again...

Maarit Hahkomaa

The Governments suggestion that this amendment to legislation was a measure to
encourage increased workforce participation by sole parents is not supported by
statistical evidence regarding workforce participation by sole parents.

“In June 2011, there were 950 thousand lone parent families, making up 15% of
all families. About two-thirds of these lone parents were living with their
dependants.

There were 780 thousand single mother families in June 2011,
making up the vast majority of lone parent families (83%).

The parent was employed in 59% of lone parent families with dependants in June
2011. In these families, 70% of single fathers were employed compared with 57%
of single mothers. Employment among single parents generally increased as the
age of the youngest dependant increased, with 73% of single parent families
whose youngest dependant was 15–24 years old having an employed parent,
compared with 35% whose youngest dependant under 5.”http://www.abs.gov.au/ausstats/abs@.nsf/Products/6224.0.55.001~Jun%202011~Chapter~Lone%20Parent%20Families)

In June 2011, there were 1.2 million jobless families - some 19% of all
families. Of these, 910 thousand were jobless couple families - about 1 in
every 6 couple families - and 290 thousand jobless lone parent families -
almost 1 in every 3 lone parent families.

The revision of the Fair Incentives to Work legislation was initially
introduced in 2006, when there were approx. 800000 single parent families
receiving PPS.The change in
legislation, which moved single parents from PPS to Newstart when their
youngest child turned 8, (rather than receiving PPS until youngest child turned
16) would apply to new applicants after July 2006. Existing PPS recipients
would continue to receive PPS under the former legislation – known as
Grandfathering.
The provision for “grandfathering” of PPS recipients at the time was a
deliberate move by the then Liberal party Government to make the changes in
legislation more palatable to the general public.

Senator SINODINOS (New South Wales) - Tuesday, 9 October 2012 “It was a very
deliberate decision on the part of the government to grandfather people who
were on these payments at a certain date. The reason for that was actually to make
it easier for the public to accept the reform by making it clear that it was
not having a retrospective impact but rather that it was focused on new
recipients. This has been an important principle in a lot of social security
legislation and, indeed, tax legislation over the years. Its purpose was to
make it easier for the community to accept the reform.” (http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansards%2F3a74ad30-c7a6-48d2-b316-bc4615cee12a%2F0011%22).

As such, the change in policy went largely unnoticed and undisputed in the
wider community, just as the Government intended.

The introduction of the Social Security Legislation Amendment (Fair Incentives
to Work) Bill 2012 which endorsed moving “grandfathered” sole parents from PPS
to Newstart if their youngest child had turned 8 before Jan 2013, is an ill
thought out and prematurely implemented policy which has been found by the
Governments own Parliamentary Committee to violate the human rights of sole
parents and their families in Australia.

Mr Harry Jenkins MP, Parliamentary Joint Committee on Human Rights, Fifth
Report of 2013 (March 2013) “1.120 The committee
considers that the government has not provided the necessary evidence to
demonstrate that the total support package available to individuals who are
subject to these measures is sufficient to satisfy minimum essential levels of
social security as guaranteed in article 9 of the ICESCR and the minimum
requirements of the right to an adequate standard of living in Australia as
guaranteed in article 11 of the ICESCR. Nor has it indicated the basis on which
it makes that assessment. In the absence of this information, the committee is
unable to conclude that these measures are compatible with human rights.”

If the change in policy has been found to violate the human rights of
the sole parents who were still “grandfathered” under previous legislation then
it follows that moving sole parents to Newstart when their youngest child turns
8 has ALWAYS been a violation of human rights given that the Newstart payment
has not been increased in real terms for 20 years.The Newstart allowance, in its absolute form has been shown to be an
inadequate level of income support for a single unemployed person with no
dependent children. The Newstart allowance is undisputedly recognised to be
$140/fn below the poverty line.

A study involving a single mother with 3 children over the
age of 8, has shown that on PPS the Mothers net financial position was much
higher. In one fortnight the parent worked 25 hours on casual pay and earned
$845.25 and then received $526.04 from the PPS pension. However, on NewStart,
the parent worked 42 hours in one fortnight on Part-time pay and earned $846.39
and claimed $225.16 in allowance. This is a total of $1371.28 for the fortnight
compared with $1071.55 (Loss of $300.00/fn) with a 17 hour increase in work
time – time away from her children.

The Newstart allowance is a completely inappropriate form of income support for
a sole parent family. The unique needs of a sole parent family are entirely
different to a single person with no dependent children and a coupled family
where both parents can share the responsibility of raising their children.
Parenting is and should be recognised as a full time job.
The policies and decision making by this Government fail to recognise the value
of parents and are destroying the family unit – the building block of our
future society.

Sole parents do the job of two parents. They don’t have time off, they don’t
get holidays and the increasing financial pressure being placed on sole parent
families will not produce a healthy nor stable future society.Grandparents raising their grandchildren,
have also been moved to Newstart and these elderly people, who have already
contributed a life time of paying taxes and contributing to the community, have
been sent to Job Service Providers and told they need to start actively looking
for work in order to keep their Newstart payments.

“Schedule 1 of the Social Security Legislation Amendment (Fair Incentives to
Work) Bill 2012 will drive already vulnerable single parents, the majority of
whom are single mothers, further into poverty. What this bill does is drop
single parents who are currently on parenting payment single down to a payment
which is nearly $140 less than what they are on at the moment. We know that
Newstart is now around $132 to $140 below the poverty line. In other words, we
are dropping single parents onto the poverty line. Aren't single parents still
parents? It is not only the mothers and fathers that we are dropping there, but
their children as well. That is what you are about to pass in this place.”90% of sole
parents in Australia are women. This policy is therefore also a violation of
women’s rights. There is a rising concern amongst the sole parent community,
that women will stay in violent relationships because they will not be afforded
the financial support to meet their most basic needs of housing, food,
transport, clothing and education for their children should they leave.
This policy, aided by the Members of Parliament who refuse to oppose it,
facilitates violence towards women and children by failing to ensure adequate
levels of financial support for domestic violence victims.

Allowing sole parents to study as a recognised activity under Parenting
Payment Single, provided an enormous incentive for sole parents to increase
their skills and education level once their children were at school. Many sole
parents, who were supported under the Parenting Payment Single pension, report
that because they were financially supported to study, they were able to find
better jobs and leave the welfare system entirely, providing an excellent
example of the benefits in providing adequate levels of income support to sole
parents.

Moving sole parents to Newstart, which does not allow them to commence study
after their youngest child has turned 8, entraps families in the welfare system
and creates a cycle of poverty rather than alleviating the circumstances which
restrict sole parents to working in casual or part time employment for low wages.
This will cost the Australian Government exponentially more in continued
welfare support for people who are unable to study or retrain and therefore
enter higher paid jobs.

Sole parents who have left a marriage, who may have funds from a marital property
settlement, are unable to buy their own homes, buy a car, have a credit card or
get a loan. The Newstart payment, as opposed to the Parenting Payment, is an
unemployment benefit and is not recognised by lending institutions as an
income.

The elected members of the Australian parliament who refuse to address these
issues, are perpetrators of negligence.

The elected members of the Australian parliament are public servants, who
assume a duty of care to the people they represent when they accept their
ministerial positions. Allowing sole parents and their families to suffer
incredible hardship and forcing them to remain trapped in a cycle of welfare
dependence under this inappropriate legislation constitutes a dereliction of
their duty of care. Damage in the form of sole parents experiencing increased
rates of poverty, homelessness, depression, domestic violence and distress at
not being able to provide the most basic needs for their families is a direct
result of this failure of elected members to adequately carry out their duty of
care.

There are approximately 900 000 sole parents in Australia and they all vote.
Their families and friends also vote. Allies of the Sole Parents Movement also
vote.

The votes of these people will be given to those electoral candidates who are
prepared to meet their duty of care obligations to the public who elect them.

The following are the demands of the Sole Parents Movement and their allies.

1.An immediate reversal of the cuts to
Parenting payment single.
2. An immediate return of ALL sole parents to Parenting payment single until
their youngest child turns 18. (A child is not legally recognised as an adult
in any other law until age 18).
3. An immediate revision of the base rate of Parenting payment single to ensure
that it is above the poverty line and provides adequate support for a
reasonable standard of living.
4. An immediate amendment to the legislation to introduce compulsory workforce
participation when a sole parent’s youngest child turns 12. Most sole parents
will enter the workforce much sooner by choice, however provision needs to be
made for parents who have at risk children and other obstacles to looking for
work.
5. An immediate reinstatement of the Pensioner Education Supplement and a
continued commitment to allow sole parents to combine study and work to meet
their participation requirements.

Thursday, April 4, 2013

Above: A message for Bill Shorten - Please do whatever you can to lock in funding for Gonski, and for the NDIS which you were instrumental in championing; And Please do not do so at the cost of further callous austerity as in the case of Sole Parents!

In the following article Tristan Ewins argues that Labor needs a credible narrative on NDIS and Gonski - with progressive funding mechanisms 'locked in'. He argues that it is an Abbott government which would really 'divide Australia'; and again that reform of Superannuation Concessions for the top 5% or 10% income demographic are key to delivering on Labor's Social Insurance, and educational 'equal opportunity' agenda.

(nb: Just in April 5th: Bill Shorten confirms that about 16,000 wealthy Australians will be targeted - those with superannuation incomes over $100,000 a year (ie: superannuation savings of about $2 million or more) - bringing in about "$350 million over the forward estimates period." (now the ABC is reporting a higher figure of $900 million; but SBS says that's 'over four years') The question is STILL - where is the rest of the money ($20 billion or more) coming from for NDIS and Gonski? At Facebook Richard Denniss is calling the decision 'pathetic'. PLS read on - and your comments and ideas are welcome here!)by Tristan Ewins

Increasingly Coalition rhetoric in
Australia emphasises what it labels the ‘divisive’ nature of Labor policies. Abbott poses as the bearer of conciliation; of ‘good government’; of a
‘traditionally classless’ Australia where issues of distributive justice never
even come in to the ‘national conversation’.Of course the old egalitarian Australian ethos rested on labour movement
traditions: on a strong labour movement, and far-reaching industrial relations
regulation. But as far as Abbott is concerned ‘why let the truth get in the way
of a good story’?

In fact, the person with a ‘plan’ to
divide Australia is Tony Abbott.The
Abbott ‘plan’ is to create ‘two Australias’: divided on the basis of the
quality of health care, education, aged care, child care, parental leave and
transport infrastructure that citizens can afford or otherwise enjoy.Quite likely, the Abbott ‘plan’ is to
entrench these divisions to the point where they become permanent. That is - to
the point where the Conservatives ‘capture’ a vital ‘middle demographic’ which
develops an economic self-interest in the withdrawal of welfare and social wage
mechanisms for the less-well-off, and including the end to all pretence of
‘educational equal opportunity’.Further
down the track there is the potential prospect of that ‘classic Thatcherite mixture’
of labour market deregulation and ‘trickle-down’ economics; resting upon the
development of a permanent layer of exploited and politically disengaged
working poor. The ‘Abbott plan’ would also almost certainly mean that user pays
mechanisms – and potentially privatisation - are applied to make up again for
budget shortfalls. Ordinary workers would also suffer the brunt of such
attacks.

Labor needs to differentiate itself
from Abbott at a fundamental level.Labor’s commitment to Social Insurance must mean socialisation of risk
regarding health care, aged care and disability care – providing real social
security for all Australians and their families. It must mean collective social
consumption in these areas to provide the best value for all.And socially-financed infrastructure needs to
avoid the drawbacks of privatisation and regressive user pays mechanisms.Labor needs to generate a winning narrative
along these themes.

But while quality public education, as
well as collective consumption and social insurance are in most peoples’
interests, such policies come with a price.With that in mind I return again to the question of superannuation and
tax reform –concerned that in the face
of another ‘fear campaign’ Labor may be on the verge of ‘losing its nerve’
before the May Federal Budget.

In ‘The Age’ today - April 4th 2013 - this
writer was concerned to hear that Labor Minister for Superannuation, Bill
Shorten claimed that changes to superannuation concessions would not be adverse
to people earning “up to four times the average weekly wage”. That is in the vicinity of or over
$250,000/year if applying to full-time work; or according to the Herald-Sun on
April 2 – around ‘the top 1 per cent’.Though if including part-time work as well the
figure would be much lower – ie: closer to $200,000/year.

Referring to a paper written by Labor MP Andrew Leigh from 2006, Matt
Cowgill pointed out in ‘The Drum’ in 2011

Those figures are now out of date, but they would
remain close enough to the current reality to impart some idea of who are the
real ‘battlers’ – as well as who are doing very-well. (and how many of these
there really are)

Further: despite claims that millionaire status
‘does not mean what it used to mean these days’, studies by the Australian
Bureau of Statistics from 2011 showed barely
10% of Australians enjoyed a “net worth” of over $1
million.

So do the millionaires really need further tax
breaks?Even when some individuals may
face retirement on ‘a mere $50,000/year’, what do we have to say for Aged
Pensioners – who have worked their whole lives – now trying to survive on
about $20,000/year – and less if treated as a couple?

By contrast, this author has long argued for
superannuation concessions to be removed from at least the top 5% income
demographic – which would bring in around $10 billion according to Richard
Denniss of the Australian Institute.

Bill Shorten had been instrumental in backing the
National Disability Insurance Scheme, and had made no secret of his discomfort
regarding austerity against Sole Parents.Yet Shorten now appears to be
going significantly further than Labor MP Joel Fitzgibbon’s concern for his
constituents in the mining industry earning a ‘meagre’ $140,000/year.And let’s be clear: Even in the ‘Herald-Sun’
on February 9th 2013, Karina Barrymore observed that the average
final superannuation savings for womenwas only $112,000 – and
$192,000 for men.

Genuine ‘battlers’ cannot afford ‘welfare for the
rich’ in the form of massive tax breaks for people who can save more money in a
year than others can aspire to save in a lifetime.And these are tax breaks which discriminate against average working
Australians – who simply don’t have the spare income to divert in to
superannuation tax shelters.Such tax
breaks come at the cost of the infrastructure, services and welfare upon which
the vast majority of Australians depend. In a sense it is ‘class warfare’, yes.But it has been a ‘war of aggression’
against poor and working class Australians: waged in the interests of the
wealthy, and in the interests of the ‘upper middle class’ – who find themselves
in the ‘ideological and economic orbit’
of those most wealthy. (Importantly while the upper middle class may not be 'fabulously wealthy' - a term deployed by Craig Emerson - they are certainly very comfortable compared with the vast majority of workers - and quite capable of paying their fair share towards the social good)

Admittedly, though, the position of some mining
workers can be ambiguous – as they enjoy high wages – but many depend on their
industrial organisation to get a fairer deal from the mining bosses.Their living expenses can also be higher than
average Australians. Many are torn between solidarity with fellow unionists,
and a sense of their economic interests as part of a relative ‘labour
aristocracy’.

And yes, the chorus of claims of ‘class warfare’ are
hurting Labor. There remains an idea of an ‘idyllic’ and ‘classless’ past; and
old Labor stalwarts such a Bill Kelty are harking back to the Hawke years of consensus
and ‘national reconciliation’. But
comprehensive ‘class peace’ was always chimerical.Attacks on the wage share of the economy, as
well as the social wage and welfare state, and industrial rights – never
ended.Though even former Conservative
Prime Minister John Howard himself stated at one point (while still in
government) that he favoured the principle
of progressive taxation!And during the
early period of the Accord, on the Left there was not an abandonment of social
and distributive justice – but an aspiration to expand social wages as occurred
in Sweden.Yet today distributive
justice and a compassionate welfare state are considered ‘unspeakable’: branded
as “divisive” and of representing “class war”.

But this is ‘the crunch’. When considered together the
NDIS and Gonskiwill cost the Budget
bottom line in the vicinity of $20 billion. And that is without even
considering the hugeinfrastructure backlog affecting the
states, with the prospect of regressive tollsfor new and maybe even existing roads, and
insufficient public transport options for many workers to even have a viable
choice how they commute to work.

It is
also without considering the plight of
our most vulnerable aged citizens: their unnecessarily pronounced suffering
as a consequence of insufficient funding for Aged Care; and the highly
regressive ‘user pays’ mechanisms that increasingly apply.

NDIS and Gonski in particular have become
‘signature’ Labor policies. So where is the money coming from?

And let’s keep in mind: Come September people will be asking the same question of Abbott.

Labor needs to ensure its ‘signature’ policies are
fully costed without further regressive
austerity!This is the precondition
for making the most of exposing the radical austerity that will underscore
Abbott’s ‘plan’ for Australia.

On March 21st Jessica Irvine – also from
the ‘Herald-Sun’ - suggested a whole suite of potential policies, including an
increase to 30% of taxation rates on those on incomes of $300,000 and
above.That apparently would bring in
$500 million a year.(about 2.5%
of what is necessary to pay for Gonski and NDIS!)Perhaps Irvine’s intention was to foster less
significant expectations – in order to make ‘root and branch’ reform of
superannuation concessions politically awkward and damaging for Labor.

The monopoly media is also attempting to rush Labor
into a commitment – perhaps to protect the interests of the wealthy, and to
render NDIS and Gonski ‘unfundable’.Allowing time for further speculation could also be damaging – as it was
with the Carbon Tax.But not nearly as
damaging as getting it wrong: dropping ‘signature’ policies, or turning again
to callous austerity (eg: Labor policy on Sole Parents) in a ‘Zero Sum’ outcome for Labor’s
constituencies.

While ‘The Age’ has generally been giving Labor a
much harder time since Gina Rinehart became the most significant individual
shareholder in Fairfax, it pretty much ‘got it right’ on the super concessions
debate in a recent editorial. Hence
the following:

“The rich can avoid the 45 per cent tax
rate on earnings above $180,000 by diverting large sums into super at the same
concessional rate of 15 per cent that applies to everyone else. Treasury
figures show 37 per cent of the value of concessions flows to the top 5 per
cent of earners…”

Super is being exploited to subvert a
long-accepted, progressive policy of taxing higher earnings at a higher rate.
Super concessions become more generous for higher earnings. The average male
retiree, Treasury figures show, gets about $270,000 in age pension payments and
tax concessions. The concession alone
is worth $520,000 on average for the top earners - well over twice the total
average ''nest egg'' of male workers nearing retirement and more than four
times their female peers' balance. The top 20 per cent of earners get half the
value of all concessions.

Taken proportionately, that would also
mean $15 billion in concessions for the top 5 per cent alone by 2015.

Drawing additional revenue from ‘the
top one per cent’ quite simply does not target a broad enough base to bring in
sufficient funds. If Bill Shorten and
others want to ‘back down’ on superannuation concessions, and other very significant
progressive options for tax reform, then Labor’s signature policies are either
finished – or they will come at the cost of deep austerity elsewhere.
Even further means testing of benefits such as the Private Health Insurance
Rebate cannot bring in anywhere near the kind of money that is required on
their own. The only other possibility is a series of budget deficits: and that cannot be sustained over the course of the whole business cycle either.

While the ACTU at one point was
arguing for action to remove superannuation concessions for the top 10% income
demographic, this author is again arguing for an absolute minimum policy
of removing concessions from the top 5 per cent income
demographic. This would bring in about half the money necessary for Gonski and
NDIS.Further tax reform would also be
necessary – perhaps of the Minerals Resource Rent Tax – and of Dividend
Imputation.At ‘Crikey’ John Quiggin was
on record as supporting an
increase in the Medicare Levy to pay for NDIS specifically.

There is no need to make policy on
superannuation concessions retrospective – as Simon Crean says concerns him.But there is the need to make the system
sustainable – as Swan, Shorten, Wong and others have readily admitted.But if Labor will not at the very least
remove or very significantly wind back concessions from the top 5 per cent (or
more preferably the top 10 per cent)then
the sustainability of superannuation concessions is ‘out the window’. As quite possibly are Gonski and NDIS.One way or another Labor needs to exact at
least $10 billion for this year – and more in future years - by removing
overly-generous superannuation concessions.

Most importantly: Labor needs those
improvements provided through such reform - in social services, welfare and
infrastructure - ‘on the record’ and cemented in the public consciousness well
before the September Federal election.

Australia is a growing nation which
demands investment in transport, communications and education infrastructure.And Australia is an ageing nation – with
health and aged care costs set to rise. (with aged care services already
grossly inadequate for many – involving untold human suffering)

NDIS and Gonski demand about $20
billion in new annual funding.Aged Care
requires an injection in the vicinity of $5 billion annually if the government
is serious about providing quality of life, supporting Carers and removing
regressive user pays mechanisms. Then there is the need for reform of Newstart;
and for strong investment in transport infrastructure and health services. And simply increasing the retirement age
shouldn’t be seen as an option for a Labor Party concerned with ‘work/life
balance’.

For a long time Labor has proudly
claimed the mantle of “small government” – arguing it has held the size of
government down proportionately compared even with the governments of John
Howard.This quite simply is no longer
sustainable.If Labor does not expand taxation progressively and very significantly we will see further user
pays mechanisms for education,for
health and aged care, and for transport including roads.Privatisation simply makes matters worse –
saving the government’s budget bottom line – but passing increased costs (of
administration, profit margins, and finance) on to consumers.

This author would warn Shorten, Wong,
Swan and others: There are pervasive elements of the media that will spin
everything and anything Labor says and does against it.But austerity against Sole Parents hurt Labor’s
credibility severely. And failure to provide for NDIS and Gonski sustainably
would leave the government without a compelling and credible narrative.

We need far-reaching reform of tax and
superannuation concessions in the May Budget.Without credibility on funding our ‘signature’ policies, and a record of
delivering on such commitments, Labor will not be in a strong position to
capitalise on the sweeping austerity, human suffering and social injustice
which would follow an Abbott government.

Labor
must not lose its nerve.nb: I sincerely hope I am wrong in this article and that Labor does find a way of funding Gonski and NDIS come the May Budget. I'd be glad to be able to admit I was wrong!

THE RED FLAG IS STILL FLYING HERE

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About Me

Tristan's areas of expertise include Australian and world politics, social theory, education, history, and computer gaming for PC. He considers himself a liberal, and also a socialist, but has also referred to himself as a left social democrat. He says such - conscious that there was once a time when 'social democracy' and 'socialism' were synonymous. Furthermore, Tristan is a long-time member of the Australian Labor Party - specifically its Socialist Left wing. He is also involved in the Australian Fabian Society. Tristan has written for many publications - including a stint freelancing for 'The Canberra Times': the daily broadsheet of the Australian Capital. Tristan's Personal Homepage is here: http://sites.google.com/site/tristanewinsfreelancewriter